Xbox Dominates Market in May Despite Worst Slump Since 2006

Microsoft’s Xbox 360 recorded another strong sales month and now accounts for 34 percent of all videogame revenues — spanning hardware, software and accessories — for the first five months of the year.

However, those gains are little consolation when you learn that May 2011 was the lowest month of sales for the industry since October 2006. NPD Group, which released highlights for the month today, said the poor performance was directly attributable to a light slate of new releases.

The analyst firm’s figures only represent physical retail sales for hardware, software, and accessories — and not the digital format content distribution, which is currently seeing the most growth.

While Xbox was the top selling platform, it was not the only hardware that experienced gains year over year. So did Sony’s PS3 and PSP.

Meanwhile, May was a slow month for Nintendo. Both sales of the 3DS and the Wii were light. The 3DS could gain momentum as more titles are released that take advantage of the device’s 3-D capabilities, but the Wii platform is expected to continue to sputter for the next year.

At E3 last week, Nintendo announced the console’s successor called the Wii U, which comes with a tablet-sized controller, but is not expected to launch until late 2012.

NPD Group Analyst Anita Frazier reports that combined sales of the PS3 and Xbox 360 are up 28 percent for the month and 21 percent year to date, and that declines in the month of May are mostly attributable to the Wii.

However, the Wii still has the highest install rate in the the U.S. at 36 million, a position that it will likely still hold a year from now — although both the Xbox 360 and PS3 are closing the gap quickly.

As for software sales, which fell 21 percent to $400 million in May compared to the same month in 2010, there are two explanations.

First, there were only 42 new games introduced in May as compared to 58 last May, and 72 in 2009.

Big publishers like Electronic Arts, Ubisoft and Activision have decided to pare back the number of games they are publishing to make higher quality titles that can be more profitable. All three publishers are also creating digital downloads for those titles that extend the life of the games and make more money. Revenue from those downloads would not be reflected in NPD’s figures.

Here’s a list of the top five-best selling games in May across all platforms:

1. L.A. Noire (360, PS3), Take 2 Interactive.
2. Brink (360, PS3, PC), Bethesda Softworks.
3. Lego Pirates of the Caribbean, (Wii, 360, NDS, PS3, 3DS, PSP, PC), Disney.
4. Portal 2 (360, PS3, PC), EA.
5. Mortal Kombat 2011 (PS3, 360), Warner Bros. Interactive.

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